Larry Elder

I once lived in a large apartment complex that included utilities paid by the landlord. During hot summer months or cold winter months in my previous apartment -- where I paid for utilities -- I turned the thermostat off when I left the apartment and put on the heat or air when I returned. Once I moved into the "utilities-included" apartment, I left my heat and air on all day, thus ensuring a perfect climate when I came home -- sometimes as long as 12 hours later.

Now, I knew that somehow I paid, but the cost would be distributed over all the tenants in the building. So the conscientious tenant who cut off his or her air subsidized my carefree use of utilities. Eventually, we all pay, but the effect becomes gradual and diffused over a number of people who have little incentive to "conserve."

This applies to employer-provided insurance. Employees have less incentive to refrain from seeing doctors for minor reasons, less incentive to watch and manage their own health, and no incentive to cost compare among competing insurers and health care providers.

"I'm a supporter of free markets and competition, but that doesn't apply to medicine. Improved technology and research costs just drive the price of medicine up."

Elder: New technology -- in most any field -- initially costs a lot. Consider the cost years ago of computers and calculators versus what we pay today for equipment and applications far faster, easier and more powerful. Remember the price of calculators 30 years ago? Today they are so cheap some outlets give them away as gifts -- loss leaders to get you into the store.

Government-imposed rationing sacrifices quality and innovation while imposing long wait times. But you cannot control costs without removing the incentive to improve and innovate. How many medical-care breakthroughs occur in Canada? How many new drugs to improve patient outcome come from Canada? Without the profit incentive, you get fewer entrepreneurs and fewer investment dollars because you've diminished the likelihood of reward.

Want efficiency? A friend of mine who serves on the board of a hospital in Ontario recently wrote: "We have actually had to send money back to the government because the surgeries -- scheduled months earlier -- didn't occur because patients went to the U.S. for treatment instead. Funding is specific to some procedures, and if not used, the money is sent back. Right now we are losing the surgery money because we have a bed shortage for folks who can't return home because of the level of care they need, but there are no facilities for them to transfer to. Why, you ask? Government regulations make it next to impossible for private people to make a profit. And so the vicious circle continues."

Welcome to ObamaCare.


Larry Elder

Larry Elder is a best-selling author and radio talk-show host. To find out more about Larry Elder, or become an "Elderado," visit www.LarryElder.com.